Intel’s “one generation ahead” strategy

By
10.25.2002 :: 2:56PM EST

Intel has not been reticent of late to reveal its future chip plans. The company has assured us that 3GHz Pentium 4s will be available in quantity this quarter, and that Prescott (Pentium 5?) will scale to 5GHz. Intel also claims that the Internet-on-a-chip scheme is alive and well. But the most interesting comment that Intel made was CEO Craig Barrett's boast that Intel would remain “one generation ahead” of its rivals in manufacturing. Intel does have an impressive track record of being the first to come out with a new process generation, and plans to have 90 nm parts out in the fall of 2003. But many other semiconductor makers are also claiming to have 90 nm chips out during that time frame. Intel is probably assuming that other chipmakers will stumble, while it smoothly ramps new process generations. An alternate hypothesis is that Intel is going to commit to spending substantially more money on process technology than it originally planned in the hopes of pulling away from everyone. That situation, however, is unlikely. It is expensive enough to simply adhere to the current scaling roadmaps. To be even one year ahead of rivals in semiconductor technology Intel will need to greatly increase its spending.

USER COMMENTS 73 comment(s)

Intel is ahead(3:42pm EST Fri Oct 25 2002)It seems to me that Intel is generally ahead quite abit. They've had .13 for awhile (and so have others), but everyone else seems only to be shipping low volumes of .13 right now.

I imagine the same will happen at .9. Intel (and others) will claim to have .9 going, but only Intel will have it shipping in any volume.

.18 Was a Problem(4:44pm EST Fri Oct 25 2002)They did stumble somewhat at .18, they delivered their first coppermine pIII's but had difficulty getting high speed parts. That is the only time I remember them having real process troubles, and it was relatively short lived. That said, they still did have .18 in volume a few months before AMD. Historically they have been about 6 months ahead but this time it appears that they are somewhat better than that. – by Sean Langley

however(6:54pm EST Fri Oct 25 2002)Other companies have shown that they don't need the newer technologies to make their flagships as fast. Through better designs their competitors have taken a large percentage of the market (15% compared to 2% before). What if AMD accomplishes on .13 what intel needs .09 to accomplish? Are they really a generation ahead? – by z1

word up, z1(8:03pm EST Fri Oct 25 2002)In the end, what matters (to true geeks) is not the technology but performance. If Intel starts selling a processor containing the latest advances in computer engineering, I would certainly agree that it is “one or two generations ahead”. But if AMD's solution ends up having superior performance, they're getting my money.– by iiiiiiizzzzzzaaaaa

AMD offers the smoothest upgrade path.(10:28pm EST Fri Oct 25 2002)Intel over the past few years have been trying to force users to upgrade their mainboard (chipset) with every CPU upgrade. That sucks!– by NoM$KissAss

Yeah…(12:15am EST Sat Oct 26 2002)The only way Intel has a chance of beating AMD at anything is trying to reach a new process generation first. Well, it's the only choice that Intel has to make in order to survive. – by Affez Pow

You pay for speed(12:59am EST Sat Oct 26 2002)Intel does always have it first but in this game it isn't always about being first it is about being the best. AMD continues to follow suit with a better process at a cheaper price. – by Fail_Safe

AMD still holds a super design(1:15pm EST Sat Oct 26 2002)Intc's cash burn resembles a scared company,because its Hammertime.AMD has award winning fab and has plans to build a joint fab venture with UMC.Intc has never felt this much pressurethats why every thing is in a hurry-up mode…..imo– by to legit to quit

Upgrade to the 64-bit Itanic (yes, you read that right…rhymes with Titanic)? You've got to be kidding me. Why would you run a 64-bit processor on a home system when there is no software (other than OSes) that can take advantage? So you're saying that if I upgrade to that embarrasment of a processor, I wouldn't need to upgrade my MoBo? Wow, where'd you get that from? – by AMD man

AMD man(4:50pm EST Sat Oct 26 2002)

I think Askheart was re-inforcing NoM$KissAss' statement. I think it's a given that the upgrade path from IA-32 to IA-64 is an *EXPENSIVE* one.

Read their balance sheet. They will turn a profit, after taxes and all expenses, of something on the order of $2+ billion this year. To put that into perspective, with their profits from roughly 8 monthd of operations Intel could buy AMD lock stock and barrel.

Secondly, Intel is also in the middle of a stock repurchase plan where EVERY QUARTER they shell out $1 billion in hard cash to buyback their own stock.

Summary:

This year intel will turn a profit of $2+ billion, AND

Shell out $4 billion in stock buybacks

AND

Spend $4.7 billion +/- on new FABS

AND end the year with $11 billion in cold hard cash…

Intel is strapped for cash.. ya right..

– by QKC

stuff(1:42am EST Sun Oct 27 2002)Prescott will not be the Pentium 5 if its going to start at 5ghz, Intel already said they will see the P4 to 10GHZ, if your interested. – by Synonymous

AMD man/Rick(9:30am EST Sun Oct 27 2002)*HA!*

Go figure if am I willing to buy a sparkling fast Radeon card to just install it on a brand-new sinking Intel 64-bit system… – by Askheart

what does it matter?(9:41am EST Sun Oct 27 2002)Everyone is so focused on the speed war, with the occasional mention of processing power thrown in. What seems to be lacking in consideration is that in reality, even a 2ghz at this time is over kill for basic pc functions. A vast majority of pc's are used as simple word processors, as a means to surf the web, and as a basic means of communication through email and instint messaging.

To put this in perspective, all those tasks can be accomplished on a PDA, abite inconveintly. Never the less they are still accomplished. The bulk of the market is not looking for the greatest speed or power. They want something that is economical and useful. It is the market that drives reality and we need to look at where this reality is going.

– by -thinker

Quanta-K Cat(10:21am EST Sun Oct 27 2002)Following your statement it's easy to figure out that Intel will still have a degree of control over the company's future financial and stock value balances.

Should it be?

Intel is betting on an “upturn” for the next year. So…

– Intel shall buy stocks at high prices which most likely, due to market constraints, could boast no value increasement through the next two quarters.

– Intel might end selling stocks at prices lower/equal or at best not much higher than that Intel used to pay.

– After a while, Intel's stocks could be a good bet in time and everyone's into them therefore increasing Intel's marketcap… or…

– No one wants to buy them just because Intel continues facing a DOWNTURN

The latter way doesn't add positive value to Intel's forthcoming financials. Better do some calculation to glance at *after* the end of this year, QKC. – by Askheart

re what does it matter?(2:49pm EST Sun Oct 27 2002)Thinker has a valid point“HAHAHAHA”, what are you going to do with your 3Ghz p4?…run hundreds of packets searching for aliens?I am much more interested with the prospect of current processors being optimized for lower power consumption etc. Go spend your 3000$ on your killer machine that keeps the power company in business.. I'll wait a year or two, look at whats on the market, and pick up something better, for less $. – by theFormatJunkie

Some people…(6:30pm EST Sun Oct 27 2002)That HAHAHAHA guy's post is pretty immature, he really thinks about processor speed and not BANDWIDTH. He obviously never heard of a gigaflop, last I knew, a 2.53 P4 couldn't touch a G4 Mac with a 10 foot stick. Not that I am Mr. Mac fan, but I am not so ridiculously loyal to one brand or platform that I can't appreciate someone else's efforts. – by DW

Attn: Geek.com management(11:20pm EST Sun Oct 27 2002)The comments of by HAHAHAHAHAHAHAHAH are not only not professional, they're in appropriate. I suggest you look up his IP address and talk to him or suggest some web site for professionals who get tired of opinions expressed with an excess of profanity. Maybe this site isn't for me anymore. Like to hear your thoughts. – by Whats your position

Whats your position(6:54am EST Mon Oct 28 2002)

Comments like HAHAHA's don't last long on this site. The only reason it lasted as long as it did this weekend was because it was the weekend and the individuals responsible for removing such content were away for the weekend.

Additionally, if you see content like that again in the future you can email us directly. We do respond to all reader email and you will know one way or the other why an item was left/not left. And, if we haven't responded to you after a long enough period of time you could try contacting some of the other writers on geek.com..

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– by Rick C. Hodgin

Good news(1:02am EST Tue Oct 29 2002)I guess some out there may be missing some important points. If Intel is gearing up now for a .09 micron wafer then the higher speed cpu's from them will be availiable sooner. Also at .09 they should draw considerably less power at same speeds when compared to .13 micron. Their ability to produce .09 micron cpu's will pave the way for others to also build .09 micron (ie: lower power consumption and faster) support circuits like ram, GPU's, etc. AMD fans should be greatful instead of pigheaded, if Intel hadn't licensed the x86 technology to them back in the 386 and 486 days there would be no Athlons today. On another note: Intel never said it would be building P4's past 4Ghz and that can be verified right thru their webpages. Around 3-3.2Ghz the Northwood will cease and the Prescott will take over. Somewhere around 4Ghz-4.5Ghz the Tejas or Nehalem will take over and no more Prescott (aka P4).– by Read